Outsourcing hits US techies hard

Times of India ^ | MAY 26, 2003 | CHIDANAND RAJGHATTA

[Lessismore]

WASHINGTON: On a recent April afternoon in Silicon Valley, moments after he was told he had been laid off from his computer programming job at a Bank of America training centre, Kevin Flanagan stepped into the parking lot and shot himself dead.

Some of America's technology workers, who like Flanagan have also had to collect pink slips over the last several months, think they know why Flanagan took his life: Bank of America not only outsourced his job to India, but forced him to train Indian workers to do the job he had to give up.

In the weeks since his death, the techies have used the incident as fuel to fire a campaign against outsourcing to India, an issue that now seems poised to become a major sticking point between the two countries. Several US states are already considering legislation to ban or limit outsourcing.

Bank of America is one of several major US corporations – General Electric, Microsoft, Intel are among others - under scrutiny for outsourcing jobs to India. The Bank created what is called a "Global Delivery centre" in 2000 to identify projects that could be sent offshore.

Since then it has signed agreements with Infosys and Tata Consulting Services (TCS) to provide solutions and services.

In an e-mail exchange with this correspondent, Kevin's father Tom Flanagan said "a significant reason for which my son took his life was indeed as a result of his job being outsourced."

"Did he blame India for his job loss? No. He blamed the "system." He couldn't understand why Americans are losing jobs. Rather I should say he understood it economically, but not emotionally," Flanagan said.

Bank officials, who did not return calls relating to Flanagan's death, have said in the past that the deal with Indian companies would effect no more than 5 per cent of the bank's 21,000 employees, or about 1,100 jobs, in its technology and operations division.

According to some surveys, the US has lost at least 800,000 jobs in the past year and some 3.3 million jobs will move overseas over the next few years because of outsourcing, mostly to India.

The Bank has also acknowledged that it had asked local workers to train foreigners because such knowledge transfer was essential. According to Tom Flanagan, his son was "totally disgusted" with the fact that he and his fellow-workers had to train foreigners to do his job so they could take over. "That sir is a travesty," he said in one e-mail.

US tech workers are challenging the corporate world's claim that it is outsourcing work to improve bottomlines and efficiency. Some analysts have also pointed out that US corporations were being forced to tighten up by the same people who are moaning about outsourcing, and who, heavily invested in the stock market, demand better performance.

But on one website that discussed the Flanagan case, a tech worker pointed out that data processing consumed only a small per cent of revenues and was hardly a drain on the Bank's profit.

"(It is) a prosperous bank which has let greed trump any sense of patriotism or social responsibility," he fumed.

[BrooklynGOP]

More money available to spend elsewhere.

My original question stands. More money to spend where?

[TaxRelief]

My original question stands. More money to spend where?

More money to spend on innovation and capitalisation, which means more jobs now and in the future. Do they not teach macroeconomics in school any more?

[USMMA_83]

Oh if you only knew Race, if you only knew.

[USMMA_83]

Ok, I'll take your optimistic view, and hope to God you are right for the sake of this country and it's future. Otherwise, we might just as well joing the EU.

[BrooklynGOP]

More money to spend on innovation and capitalisation, which means more jobs now and in the future

More jobs now and in the future in India.

[clamper1797]

If the massive unemployment of hard-working American people ESPECIALLY AT THE HANDS OF FOREIGNERS is OK with you and just a "casualty" of free market economics, get ready for some reality orientation when millions of people with no money, no hope, plenty of time on their hands and a seething anger take to the streets. It won't matter to a furious mob of desperate people that they just don't have your grasp of certain economic theories. I personally hope we do have a massive political upheaval in this country. It's long past time and there is way too much dead wood and corruption breaking the backs of decent people in America.

Your lips to Gods' ear ....

[USMMA_83]

Couldn't help but laugh at your post. Pray tell me one gem from each of the great minds you noted in your post. Ok, I'll make it easier, name a common thread between each of the great minds (in your note).

[Lefty-NiceGuy]

No, I want to know a conservative answer to the supposed problem. So far I've heard mostly two types of respones:
1) This isn't such a problem. Just get another job. Life will go on. In the end we'll be better off then before, because the free market will provide for us all if we just leave it alone.
2) Boy this sux ... I lost my job and ....

I understand you beleive #1 and I'm not saying your wrong. I wasn't writing to you. I was writing to more of a #2. If this is a conservative site and he's a conservative, well what the **** is he going to do besides complain?

Hats off to you seem like your at least you've got an answer to the question. Is that the only "conservative" answer?

About the Lefty thing -- It's just a name. I'm don't consider myself to be left or right, though I do agree with much of what's posted. Quit picking on everyone that strays from your party line. Isn't it ok to play devil's advocate once in a while?

[Pukin Dog]

I've always thought the Navy aviation community puts entirely too much emphasis on the process of landing.

I was done with this subject, but someone told me that I should respond to this and what you said about my not wanting to compete for leadership. Frankly, I think you are just baiting me, but if not, I'll respond.

The plain truth son, is that Landing grades determine your future in NAVAIR. Unless you are an incompetent woman, (I can say that now) poor grades mean you dont get to join the Tailhook society. The two CO's I had that I admire most, "Pogo" and "Snort", were sticklers for OK-3's or you were going to lose your slot smartly. No sense in putting someone through the training command, if the airplane is going to end up in the water, usually with the fool still in it, and very dead. Once I had an Air Force exchange pilot in my back seat one night for an ride out to the America, decide that NAVAIR was not for him and beg out of the assignment after taking a night trap. It's not for everyone. The emphasis is for saving your ass to fight another day. Combat is secondary to survival.

My getting out at 21.5 years had more to do with the mission, as I was already on the Captain's list on my way to flying a desk at War College. All Officers are managers, from Ensign on up the chain. Flying is secondary. Most guys still wanting to move up are NFO's and fewer are pilots. Most of the carriers have NFO's commanding these days. I had no desire to command a ship or a desk. Were it a matter of competition, it would not have been a problem.

[Billy_bob_bob]

If I'm a "freking socialist" (can't even spell "freaking" right?) then so were the founding fathers. Look it up. We had tariffs in place for a long time before this whole "free trade uber alles" movement came along. Are you sure you're a conservative? What is conservative about allowing every single industry in this country to be shipped overseas?

BTW, there is a concept called "disagreeing without being disagreeable". Perhaps you should look into it. My position on tariffs has been arrived at after studying the works of Adam Smith, Ludwig Von Mises, Hernando De Soto and the founding fathers.

Hernando De Soto is an especially interesting case study, a former Marxist who discovered the real cause of poverty is when a society lacks the social and legal infrastructure necessary for the creation and protection of wealth. If you never develop this infrastructure then your wealth making efforts are doomed. Furthermore, socialism destroys the ability to create wealth by imposing artificial roadblocks in the path of those trying to create weath, by forcing productive people to spend their energies complying with onerous laws and regulations that have little practical value, if any.

Thanks to the lessons learned from these writings, I have learned the importance of free enterprise, private property and rule of law. However, I cannot discern any advantage to a society in allowing their industries to be shipped overseas to countries that don't really have private property, that don't have any social or legal infrastructure and who don't have an effective legal system. This only sets us up to send our wealth over to countries that don't have our best interests at heart, and who might be inclined to do us harm someday.

Of course, writing several paragraphs defining and defending my position isn't as much fun as calling those who disagree with me names, but some of us have to be grown ups after all.

[Lefty-NiceGuy]

Amen. I'm not a "freking socialist" either :-), and you're right "conservatives" used to be ok with tariffs a long time ago. If there were a conservative who was ok with using "small goverment intervetion" (if that's possible) to deal with this issue, what would he suggest?

How do you deal with companies moving departments overseas? How would you put a tariff on a service being transfered internally in a company? How would you do it without turning it into a burocratic nightmare? Is there any nice new idea besides tariffs?

[vigilo]

The trend is away from outsourcing since many larger companies have found that any savings gained by paying lower salaries(and they aren't really lower, they only appear to be lower) are lost because of the additional management and work quality issues that come up. Bottom line: outsourcing is NOT the wonderful thing so many companies though it would be. On paper it looks great but in practice it is a mess. Too much communication between too many people who have no real interest in the business because IT ISN'T THEIR BUSINESS. They can give you crap and move on because THAT'S THE WAY OUTSOURCING WORKS. Some other sucker can fix your crap after you've gone back to India or on to another assignment in Boston or Germany. Outsourcing is another management fad that, while it will remain at some level, will die out as a major organization principle. BTW, we'll also move away from server farms back to big iron, but that will take a little longer.

[Billy_bob_bob]

Good questions. I would counter with another question: Is there a point when nations and multi-national corporations cannot co-exist? If, in fact, there is a point where one must prevail over the other, then I submit that it is very much in our interests as citizens and human beings to ensure that nations and national rule of law prevail over multi-national corporations.

[hedgetrimmer]

A lot of companies move overseas because of policies our government put into place that practically boots them offshore. Did you know that investment in China is guaranteed by the federal govt? If you invest there and something bad happens, you will be fully compensated for you loss? Not so for businesses that invest in the United States. Why the favorable policy toward China investment? Could it be a little insurance policy put into place by Senator Diane Feinstein to protect her hubbies millions? Do you think there is a fair playing field going on here all you free traders?

[El Gato]

I had no desire to command a ship or a desk.

Isn't that pretty much what I said? Also you confirmed my observation about a bit too much emphasis on landings. You do know that several times the Navy aviation community has deepsixed various developements, usually quite early in the process, that would get the aircraft on the deck without nearly the danger, but also without nearly the "glory" for want of a better word. The point still is to fly and fight. Getting home, while important and not unrelated, is still secondary to the mission. Now I'm sure that folks who are good at getting the OK-3 are probably good at dropping bombs too, but not necessarily, and they are even less likely, but still more likely than not, to be good at air to air. We've not fought in an environment where their was signifigent "Red" air opposition since WW-II, and that has tended to distort or change priorities, in the Air Force as well as the Navy.

Then there is the problem of the Navy air developement community not being able to bring a new aircraft to the fleet. The F/A-18 only kinda sorta counts. The A-12 was a disaster, I know a bit about that as I was working on one of the major subsystems. Where is the 21st century fleet defense fighter? It's not the F/A-18 and the F-14s really ought to be called F/A-14s, or maybe just A-14s.

Oh, and about calling me "son". Unless your commisioning year is somewhat before mine, 1973, it would not seem appropriate, now would it?

[BlazingArizona]

...They were afraid I'd leave the first chance I got. It's tough, I'm now reworking my resume and leaving off a lot of my past qualifications, also stressing more of the entry level temp work I've been doing.

For many of us in tech, a well-written fake resume is the key to getting at least enough work to scrape by. I have "adjusted" my resume to make it look as though I have ten years of experience in the field. If anyone found out the real figure (thirty-eight years) I wouldn't get hired anywhere. HR weenies can always tell if you claim education and experience you never had, but there's no way they can find what you leave out.

[BlazingArizona]

The trend is away from outsourcing since many larger companies have found that any savings gained by paying lower salaries(and they aren't really lower, they only appear to be lower) are lost because of the additional management and work quality issues that come up.

I wish. Unfortunately, what a lot of companies are doing on finding out that oursourced work is of low quality is to outsource their customer service desks too. When the crappy Third World software fails and the customer calls the 800 number, he runs into a wall of people speaking with incomprehensible Caribbean or Asian accents. And is our intrepid customer going to take his business elsewhere when he gets treated like this? Not if all his friends tell him that the competition is doing it the same way.

[Pukin Dog]

You implied that I somehow backed away from competition, which is not the case at all.

I dispute that the Navy can put TOO MUCH emphasis on landings. It is the core skill one must have to be successful. Your comment about "GLORY" being the reason for not developing safer methods of coming aboard is just silly.

Though we have the ACLS(Hornet)and DFCS(Tomcat), just what do you expect a Puke to do when the systems go down on a dark rainy night? Suppose your needles go down from mission damage? What then, smart man? Ditch at sea, or rely on your training to bring you home?

The reason why our current forces get so little 'Red" opposition, is that they know for the most part that scrapping with us is a sure ticket to hell. And do not kid yourself, we had plenty of practice against bandits in the Gulf of Sidra, and the ROE was the only think that kept a lot of ememy alive to see another day. They would feint us, merge on us, and after 30-40 seconds with their mirrors full of Tomcat they would run for home. Most CAP's all you had to do was light them up and they would scoot.

The problem bringing new craft to the fleet can be summed up in two things. Democrats and no-dick Admirals. If the Tomcat had gotten the engines it was supposed to have, it would still be the main platform today, as we would have never had a Hornet. The A-12 almost killed NAVAIR, and if the Super Hornet doesnt do it, then nothing will.

Right now, Squadrons are screaming bloody murder at how crappy the Super Hornet performed in Iraq, and you may yet see a Super Tomcat proposed very shortly with FBW and Strike Eagle electronics.